[VIDEO] PM hails new fund as one to ’drive Rwanda into middle income status’

Prime Minister Anastase Murekezi has said a new citizen-oriented fund, dubbed ‘Iterambere Fund,’ will be a big boost to Rwanda’s push to achieve middle income status by the year 2020.

The Iterambere Fund, which will be run by the Rwanda National Investment Trust Ltd (RNIT), is intended to foster savings culture and mobilise resources domestically to spur economic growth.

Speaking at the launch in Kigali, yesterday, Premier Murekezi said the Fund is in line with the country’s Vision 2020 goals under which the Government projects income per capita to reach $1,240 against economic growth of 11.5 per cent.

A March 2016 report by the National Institute of Statistics of Rwanda showed that GDP per capita was $720, from $221 in 2003.

“I encourage all people and entities, both government and private sector to take advantage of this opportunity to promote a savings culture not only for economic development but also for a promising future for all,” Murekezi said.

The FineScope Rwanda Survey 2016, conducted by Access to Finance Rwanda in partnership with various members of the steering committee, including the Ministry of Finance and the central bank, indicates that that 5.2 million Rwandans, equivalent to 89 per cent of adult Rwandans, have access to financial services.
“This indicates that Rwanda is moving fast, but we have to move faster,” the premier said.

He said empowering Rwandans financially indisputably makes them and the country develop faster.

To achieve desired economic growth, he noted that in January 2008, the Government set up the Capital Market Authority (CMA) before launching Rwanda Stock Exchange in 2011.

“Time has come that the Government launches RNIT Iterambere Fund,” Murekezi said, adding that the Fund will particularly help Rwandans with little means who have been afraid to embrace the capital market because of low income as the minimum investment in the Fund will be Rwf2,000.

For one to have dividends monthly, they should have a minimum investment of Rwf100,000.

Murekezi cited countries such as Luxemburg, Switzerland and Singapore that he said have reached appreciable GDP and GDP per capita thanks to many savings and investment funds.

He said Luxemburg, a country with only 2,500 square kilometres of land surface, has about 3,900 investment funds that had Euro3,000 billion as of 2015.

“If people make collective investments, it creates means to get money to invest in projects that benefit the people. If we learn from these good examples, we can rapidly achieve the savings target of 20 per cent of GDP by 2020,” he said.

In 2009, the Government adopted a national savings strategy under which savings culture is promoted from the individual and to the national level.

“The goal is to achieve gross national investment target of 30 per cent of GDP by the end of second Economic Development and Poverty Reduction Strategy (2017/18),” the Minister for Finance and Economic Planning, Claver Gatete, said.

He said 89 per cent of adult population has access to financial services, which surpasses the target of 80 per cent by 2017, with 2020 target at 90 per cent.
To achieve desired investment targets, the financial sector requires a variety of products and instruments like unit trusts.

People who have invested in the Fund will be able to sell their units six months after the Initial Public Offering (IPO) or primary market, a two month period which started on July 12, 2016, according to André Gashugi, RNIT chief executive.

However, Gashugi said a unit priced at Rwf100 in this period will be bought at the value it will have made after that period.

For asset allocation, Gashugi said, 70 per cent to 100 per cent will be invested in debts (including bonds and other fixed income products) and 30 per cent listed equities (including stocks).

During the initial sale period, the units can be acquired through RNIT office or branch of collecting agents. Currently, the banks include Bank of Kigali, Banque Populaire du Rwanda, Crane Bank, Ecobank, GT Bank and Umwalimu SACCO.